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Senate Version of ACHA a Step in the Wrong Direction

If you’ve ever wondered why Americans hold the President and Congress in low regard, the health care reform legislation currently careening through the halls of Congress provides an answer. On Thursday Senate Republicans revealed their version of Affordable Care Act repeal-and-replace legislation. After working weeks in secrecy, this is what they came up with? It would be embarrassing if it wasn’t so sad.

And it does all this in a manner that, depending on your ideology and level of cynicism, can be described as incompetent, mean, inept, savvy, inadequate, or malpractice. It makes one wonder why Senate Majority Leader Mitch McConnell insisted the bill be drafted in secret. At least if provisions had been debated in public we would have had a chance to get used to some of this foolishness. Seeing it all at once as a cornucopia of bad policy, however, only makes its flaws more prominent.

Why am I so disappointed with the BCRA? ? Why do I believe it will result in Congress (and, due to his support of the legislation, President Donald Trump) to fall further in the public’s regard. First, because meaningful, substantive health care reform is sorely needed. We need to address the ACA’s many shortcomings. We need to address the cost of medical care. We need to create a stable insurance market. There’s a lot that could — and should — be done.

Instead we get proposals that common sense makes clear are dangerous and unworkable. Consider:Republicans repeatedly claim their goal is to lower health insurance premiums. Yet a key provision of the BCRA does away with requiring consumers to buy health insurance coverage (an “individual mandate”), but still insists carriers issue coverage to all applicants regardless of their health conditions (what’s called “guarantee issue”). This out-of-balance approach guarantees the individual market will enter a death spiral in which coverage becomes increasingly affordable and, soon, unavailable.

Back in November, when I first wrote about what health care reform might look like under President Trump, I imagined what would happen if Republicans eliminate the individual mandate but kept guarantee issue of coverage. “Under this situation, few consumers — especially young, healthy consumers — will likely obtain coverage until they get sick or injured. This adverse selection would be cataclysmic and few, if any carriers, would want to participate in such a market. After all, insurers are in the business of spreading risk across a broad population. Guarantee issue without an obligation to buy coverage guarantees a concentration of risk across a narrow population.”

Or take the political gamesmanship at play. Many Republicans are expressing concerns regarding the bill in its current form. Some of these appear orchestrated. Senator McConnell will allow them to make certain amendments to the BCRA and add a few billions dollars more in spending to address a worthy cause. These current critics will then find the bill improved sufficiently to earn their vote — and make them look like tough negotiators. There’s nothing inherently wrong with this Kabuki dance, but it does make one skeptical of the process.

Then there’s the reality that much of the Republican health care reform plan (whether the Senate’s BCRA or the House’s American Health Care Act) has nothing to do with the effort to “repeal and replace” Obamacare. Yes, the ACA expanded Medicaid eligibility and whether to reverse that expansion is certainly germane. However, the BCRA and the AHCA go further. They not only refashion how states are reimbursed for Medicaid spending, they reduce the programs growth by hundreds of billions of dollars.That their “health care reform” legislation happens to cut taxes for the richest Americans by a nearly equal number of hundreds of billions of dollars only makes this approach more unseemly.

So is it a coincidence that the Senate health care reform bill delays substantial cuts to Medicaid until 2021? That’s the year, barring a change to the Constitution, in which there can legally be no President Trump — at least not the current President Trump. Or is this a way to reassure some moderate Republicans that a future Administration might support reforming the BCRA to do less harm to their constituents?.

Democrats are also contributing to the mess that is health care reform 2017-style, too. They delight in attacking Republican repeal and replace measures, invariably acknowledging that the ACA needs retooling. Yet Democrats fail to offer any hint of the reforms they believe necessary. This is as bad as President Trump proclaiming that Obamacare is dead while taking steps to kill it by threatening to withhold funds and generally creating uncertainty. When government leaders are consistently trying to have everything both ways it’s hard to respect them or the process.

June 22nd was a bad day for health care reform and American politics. Senate Republicans introduced a bill that does more harm than good, Democrats remain silent on alternatives, and the President adds chaos to the mix.

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4 thoughts on “Senate Version of ACHA a Step in the Wrong Direction”

If any ACA reform includes a pre-existing condition limitation or a “high risk pool”, I’d still like to know:

1. What will be the definition of a pre-existing condition?
2. How will insurers ask their health questions?
3. Will they “underwrite at claim time”? (we know they won’t)
4. Will they rescind when applicants omit health info (we know they won’t)
5. How will they determine who goes into high risk pool?

Current ACA apps ask tobacco question with +40% rating for smokers. But there’s no tobacco underwriting or penalty when smokers lie on app. So almost all ACA insureds are “Non Smoker”. What will be different with health condition pre-x exclusions?

Thanks for the great questions Maurice. My take is that pre-existing conditions will be whatever carriers define as a pre-existing condition, just like in the pre-ACA days. Insurers will ask health questions the way they did back then, too — on the application. Carriers will investigate conditions that weren’t disclosed and possibly rescind coverage, but you are right, they’ll be very careful in doing so. As I understand it, a carrier sets the standard for refusing a particular application and then that applicant will be eligible for the high risk pool.

You’re right that some applicants may not disclose their pre-existing conditions. But carriers can uncover them without resorting to voluntary disclosure. For example, there are firms that sell access to prescription data bases. Underwriters can determine a great deal by what prescriptions a consumer is using. If the drugs or the underlying condition aren’t revealed on the consumer’s application, that alone would be grounds for denying coverage.